The Tie That Binds

by Jeff Emanuel on March 19, 2009

Federal Law Linking Social Security to Medicare Inhibits Freedom of Choice, Depresses Quality of Care, and Will End Up Costing Americans a Boatload

It’s no secret to anybody who’s been paying attention to budget numbers that the United States, with a current GDP of just under $14 trillion, is $52 trillion in the hole in one specific area: Medicare and Social Security payments owed to those who have already prequalified by paying into the system.

“Think about that: Unless you accept government-run health care, you have to forfeitSocial Security — a federal benefit you have paid into for your entire life.”

You can flip and fudge the numbers any way you want; no matter what, that’s some real money we’re talking about right there — and that’s just what’s already owed folks who are over 22 and in the workforce or have already retired, all having paid into the system at some point. The program could be ended today, and that’d be the unfunded liability we the taxpayers are facing: $52 trillion.

A Lack of Choice You Probably Didn’t Know About

Here’s something you might not know: the federal government skirts around this issue when doing its budgeting by counting Medicare and Social Security as “liabilities,” rather than “debts,” because those who are or will be eligible for returns under the programs have no actual binding or contractual right to those returns. That’s why you hear so much about a $7 trillion-ish national debt — that additional $52 trillion is left out of the discussion through the use of clever accounting terminology.

Current and future Medicare costs for those already owed benefits make up over 60% of that liability ($32.3 trillion). Given this, you might think it a good idea to opt out of a Medicare program that probably won’t be solvent enough to cover the costs of your care as a retiree, in favor of a Health Savings Account or some other less costly, more efficient health insurance plan, which you can help pay for with your meager Social Security benefit checks.

Here’s something else you might not know: under federal law, that’s not an option. Whether there’s money to fund your Medicare or not, once you’re retired, you’re legally required to accept Medicare as your health coverage. If you try to turn down Medicare Part A and go with another, more cost-effective (and higher quality) form of coverage, you officially forfeit your ability to collect on the Social Security benefits you paid into your entire working life.

Working to Increase Personal Choice

Representative Marsha Blackburn (R-TN) has introduced legislation that would change that, cutting the ironclad tie binding Medicare enrollment to Social Security benefit eligibility. HR 1118, the Health Care Choices for Seniors Act, would cut the cord tying Medicare to Social Security, and would allow seniors the choice (yes, choice in health care — can you imagine that?) of accepting a voucher for a private Health Savings Account or other high-deductible private health plan in lieu of Medicare Part A “benefits,” or of opting out of Medicare altogether, without losing the Social Security benefits they paid into their entire working lives.

The current “penalty of opting out [of Medicare] is severe because you are also forced to opt out of all Social Security benefits,” said Blackburn in a February 27 speech announcing the bill.

“Think about that for a moment,” she continued. “Unless you accept government-run health care, you have to forfeit a federal benefit you have paid into for your entire life. For a healthy 65 year old with a robust HSA, this is a galling prospect.”

Prospects Dim Under Current Power-Grabbing Congress and Administration

Blackburn’s “Health Care Choices for Seniors Act” follows in the footsteps of H.R. 7148, Rep. Sam Johnson’s (R-TX) 2008 “Medicare Beneficiary Freedom to Choose Act,” which also would have freed seniors to choose efficient, quality health coverage without losing their Social Security benefits. Unsurprisingly in the Democrat-led 110th Congress, Johnson’s bill never made it out of committee.

In the Democrat-dominated 111th Congress, Blackburn’s is even less likely to see the light of day. With the current emphasis being put, by both Congressional and administration Democrats, on an effort to shoehorn the entire country into a one-size-fits-all, inefficient government-run health care program, it seems a bit much to ask that a commonsense bill that allows people to opt out of one such program would receive the attention and consideration it deserves.

A Blueprint for the Future

However, in a time when the Democrat-dominated federal government seems set on expanding its scope and power at the expense of citizens’ personal freedom of choice, Blackburn’s proposed legislation should serve as a model for the Republican opposition’s commitment to providing legislative alternatives that embrace the conservative and libertarian ideals of personal freedom, choice, and independence of government control.

Real reform of government spending, management, and health care — not the so-called “reform” being offered by Congressional Democrats and the astronomically-government-expanding Obama administration — is what America needs, and is what Americans want. If the GOP can rally behind more proposals like Rep. Blackburn’s Health Care Choices for Seniors Act, then they will be well on their way to setting the tone for a 2010 election in which they can and will represent real change for America, in the form of a return to personal freedom and choice, and of smaller, more responsible government.